UK National Energy Efficiency Action Plan

Transcription

1 UK National Energy Efficiency Action Plan April 2014

2 Contents 1 Contents Introduction 3 Part 1 Overview of national energy targets and achieved savings Energy Efficiency Target 5 Primary Energy Savings 5 Part 2 Policy measures implementing the Energy Efficiency Directive 7 1. Horizontal Measures 7 Energy Efficiency Obligation Schemes and alternative policy measures 7 Energy audits and management systems 10 Metering and billing 13 Consumer Information Programmes and Training 18 Availability of qualification, accreditation and certification schemes 22 Energy Services 24 Other energy efficiency measures of a horizontal nature Energy Efficiency in Buildings 30 Other energy efficiency measures in the buildings sector Efficiency in Public Bodies 32 Central Government buildings 32 Buildings of other public bodies 34 Purchasing by public bodies 35

3 2 UK National Energy Efficiency Action Plan 4. Other End Use Energy Efficiency Measures 37 Industry 37 Transport Promotion of Efficient Heating and Cooling Energy Transformation, Transmission, Distribution and Demand Response 45 Annex A Energy Efficiency Directive Annual Report 51 Annex B Building Renovation Strategy 53 Annex C Energy Services Market Review 123 Annex D Reporting against Article 4 of the 2006 Energy Services Directive 128

4 Introduction 3 Introduction The UK welcomes the Energy Efficiency Directive (the Directive ). Energy efficiency belongs at the heart of our long term energy and climate change plan for low carbon growth. The implementation of the Directive will refocus EU efforts on energy efficiency, establishing a common framework and driving the necessary action to help the EU achieve its 20% energy saving target for By reducing our energy use and cutting down on waste, we can reduce energy bills for hardpressed consumers; make our energy supplies more secure and reduce our reliance on overseas imports; and drive down greenhouse gas emissions cost-effectively. Investment in energy efficiency will also increase productivity and support long-term growth in the UK. In 2011/2012, the UK s energy efficiency market accounted for around 136,000 jobs and sales of over 18 billion. 1 As the UK Prime Minister has highlighted, we are in a global race and it is the greenest and most energy efficient economies in Europe that will prosper. The UK Government has introduced a wide range of policies to help households, businesses and the public sector reduce their energy use. These policies are working. Energy consumption in the UK has fallen for eight of the last nine years and final energy consumption 2 is now 13% lower than in Moreover, energy consumption is now falling in all sectors of the UK economy. 3 The UK s declining energy consumption reflects our international leadership on energy efficiency; the UK now has the least energy intensive economy in the G8. By 2020 final energy consumption in the UK will be 20% lower than 2007 levels, under current projections. 4 But there remains more to do. In 2013, the UK Government launched its Energy Efficiency Strategy, which identified the barriers to energy efficiency take up and the socially cost-effective energy efficiency potential that remains in the UK economy. We are committed to realising this potential and the UK s National Energy Efficiency Action Plan sets out how the implementation of the Energy Efficiency Directive will help. For example, we are introducing the Energy Savings Opportunity Scheme (ESOS) to comply with Article 8 of the Directive. This scheme will provide large enterprises with cost-effective recommendations for energy efficiency improvements every four years. We estimate that ESOS alone will result in On a temperature corrected basis See Part 1 of the NEEAP for details of the UK s Article 3 target

5 4 UK National Energy Efficiency Action Plan overall net benefits to the UK economy of 1.9 billion between 2015 and 2030, and drive around 3TWh of energy savings annually. In addition to this, the UK is leading the way on the roll out of smart meters. This programme sits at the heart of our efforts to empower consumers by providing them with access to the information they need to make informed decisions about their energy consumption. The UK has put in place a broad range of energy efficiency policies as part of our first ever overarching national energy efficiency strategy 5 launched by Prime Minister Cameron in Through the introduction of the Green Deal and the Energy Company Obligation we are helping households insulate their homes and ensuring that they have access to trusted information about energy efficiency. The UK Green Investment Bank which was set up in November 2012 with 3.8 billion to invest before March 2016 is driving innovation and infrastructure investment, and connecting demand for energy efficiency with finance. Later in 2014, the Government will pilot its Electricity Demand Reduction scheme, as part of our Electricity Market Reforms, which will further stimulate innovation and drive permanent reductions in electricity demand. The Government s ambition is for the UK to use only the energy it really needs. The UK s National Energy Efficiency Action Plan details the progress that the UK has already made on energy efficiency, and the further action we are now taking to realise this ambition. 5

6 Part 1: Overview of national energy targets and achieved savings 5 Part 1: Overview of national energy targets and achieved savings 2020 Energy Efficiency Target In 2007 the European Union set an ambitious primary energy saving target of 20% by 2020, against a 2007 business-as-usual projection. This forms part of a wider package of targets known as the targets which make up the EU s 2020 climate and energy package, which includes binding greenhouse gas emissions and renewable energy targets. The EU Energy Efficiency Directive 1 (the Directive ) (2012/27/EU) represents a major step forward for energy efficiency in the EU, establishing a common framework of measures to promote energy efficiency across different sectors of the economy throughout the EU. The Directive will play a key role in driving progress towards the EU s 2020 energy efficiency target. Central to achieving this goal is the requirement in Article 3 for Member States to set national non-binding energy saving targets. The UK s Target The UK notified the European Commission on 30 April 2013 of its target under Article 3 of the Directive. The UK s target was set at the level of million tonnes of oil equivalent (mtoe) for final energy consumption on a net calorific value basis. This represents an 18% reduction in final energy consumption, 2 relative to the 2007 business-as-usual projection, and reflects the UK s ambitious energy efficiency policy package. 3 Estimates of energy consumption in 2020 can be broken down by sector based on the 2013 Energy and Emissions Projections (see table 1) Equivalent to a 20% reduction in primary energy consumption. 3 The UK s target was taken from the UK Department of Energy and Climate Change s Updated Energy and Emissions Projections (published in October 2012). 4

7 6 UK National Energy Efficiency Action Plan Table 1. Estimates of key national energy production and consumption figures in 2020 Estimate of energy consumption in 2020 Million tonnes of oil equivalent (NCV basis) 5 Total primary energy consumption in Electricity transformation input (public thermal power plants) 51.0 Electricity generation output (public thermal power plants) 21.6 CHP transformation input 3.5 CHP transformation output thermal 1.8 CHP transformation output electrical 1.7 Energy distribution losses (all fuels) 3.3 Total final energy consumption Final energy consumption Industry 22.9 Final energy consumption Transport 50.1 Final energy consumption Households 38.2 Final energy consumption Services 14.3 Final energy consumption Agriculture 0.9 Table 1 shows that the UK is projected to consume million tonnes of oil equivalent (mtoe) in 2020, 2% lower than the target set. The projected primary energy consumption of mtoe is also lower than the estimate made when the final consumption target was set. See Annex D for an assessment of the UK s performance against the energy saving target set under Article 4 of the 2006 Energy Services Directive. 5 The units are reported on a net Calorific Value basis to be consistent with the UK target.

8 Part 2: Policy measures implementing the Energy Efficiency Directive 7 Part 2: Policy measures implementing the Energy Efficiency Directive 1. Horizontal Measures The UK recognises the huge opportunity that greater energy efficiency presents. It is vital for both domestic and business customers to optimise their energy use, allowing them to reduce their bills and deliver a more sustainable society. The UK has a well-developed policy landscape which tackles the barriers to energy efficiency take up. These policies have helped ensure that energy consumption has now fallen for eight of the last nine years. The UK welcomes the focus provided by the Energy Efficiency Directive. As stated in our national Energy Efficiency Strategy, 1 we are committed to maximising the performance of our existing policies and going further. 1.1 Energy Efficiency Obligation Schemes and alternative policy measures Central to the Energy Efficiency Directive is the requirement in Article 7 to achieve a binding final energy consumption target. This target is equivalent to achieving new energy savings each year from 1 January 2014 to 31 December 2020 of 1.5% of annual energy sales 2 to final customers. The energy savings are to be met through the deployment of supplier obligations and/or alternative measures. In addition to the latest supplier obligation, the Energy Company Obligation (ECO), a number of alternative measures will help us achieve the required energy savings for this target. Foremost amongst these measures are the UK s stringent Building Regulations. These regulations, first introduced in the 1980s, will be progressively tightened as we move towards the introduction of the Zero Carbon Homes Standard in Setting the target The target requires new final energy savings each year of 1.5% relative to the average final energy consumption between 2010 and Making use of the flexibility permitted in Article 7, the UK s target has been set at 324 TWh. This calculation is described in the UK s December 2013 Notification Relative to annual energy sales over the period It should be noted that savings and policies presented are taken from analysis done for the December notification. Some of the analysis in other parts of this NEEAP has been updated. Revisions to savings for the purpose of Article 7 will be made in the June update. article7/2013_uk_eed_article7_en.pdf

9 8 UK National Energy Efficiency Action Plan Policy package to achieve the required savings The UK is pursuing the alternative measures approach to meet the Article 7 target, in accordance with Article 7(9). A total of 19 policy measures have been identified to contribute towards the target including three Energy Efficiency Obligations: the Carbon Emissions Reduction Target (CERT); Community Energy Saving Programme (CESP); and Energy Company Obligation (ECO). In total, quantifiable savings equivalent to 467 TWh have been identified against the target of 324TWh. The total energy savings which will be achieved by supplier obligations is 167 TWh. Table 2 shows the projected energy savings by policy to be observed in each year covered by the target. All the savings presented are considered additional to how the UK has implemented minimum requirements of previous EU Directives. A full description and methodology for all policies can be found at Annex B of the UK s Article 7 notification, provided to the Commission in December 2013.

10 Part 2: Policy measures implementing the Energy Efficiency Directive 9 Table 2: Final energy consumption savings by year from UK policies included for Article 7 policy plan, TWh TWh TOTAL DOMESTIC Carbon Emissions Reduction Target ( )* Community Energy Savings Programme ( )* Energy Company Obligation* Green Deal domestic Building Regulations domestic Home Energy Efficient Programmes (Scotland) Private and Social Sector Regulation (Scotland) Sustainable Energy Programme (Northern Ireland) NON-DOMESTIC BUILDINGS & INDUSTRY Green Deal non-domestic Building Regulations non-domestic Smart metering non-domestic CRC Energy Efficiency Scheme Energy Savings Opportunity Scheme Climate Change Levy Climate Change Agreements Salix public sector finance Re-Fit TRANSPORT Rail electrification Low Emission Vehicle policies TOTAL *Policies marked are Supplier Obligations and are counted for the period where applicable*

11 10 UK National Energy Efficiency Action Plan 1.2 Energy audits and management systems Box 1: Existing energy efficiency schemes requiring energy measurement and/or energy auditing CRC Energy Efficiency Scheme (CRC) This is a mandatory scheme aimed at improving energy efficiency and cutting emissions in large, but non-energy intensive, public and private sector energy users. It includes around 2000 participants in the public and private sector (which we assess to include between 4,400 and 6,400 subsidiary organisations that would fall within scope of ESOS). Its aim is to encourage organisations to prioritise investment in energy efficiency and cut carbon emissions -- through a tailored combination of drivers, including a carbon price, mandatory standardised monitoring and reporting of energy consumption (which raises awareness of energy use at the Board level of participating enterprises), and the publication of enterprises aggregated emissions data. 4 Mandatory greenhouse gas (GHG) reporting From October 2013, all quoted companies will be required to report on their greenhouse gas emissions or explain why such a report is not necessary. This includes energy use emissions. The UK is the first country to make it compulsory for quoted companies to comment on emissions for their entire organisation in their annual reports. The introduction of these reports is intended to help investors see which companies are effectively managing the potential hidden long-term costs of greenhouse gas emissions. Climate Change Agreements (CCAs) CCAs provide energy-intensive industries with tax discounts (worth 170 million a year) 5 in return for meeting energy efficiency targets. As such, measurement of energy use is one of the requirements of the scheme. Targets are set using evidence submitted by industry on abatement potential. CCAs cover around 9,000 facilities (often within the companies targeted by CRC and EU ETS, with the CRC targeting the non- CCA and non-eu ETS energy use). 6 The Green Deal provides easily accessible, targeted information about potential energy efficiency to households through a two-stage independent assessment. The first stage is based on the existing Energy Performance Certificate (EPC), which is mandatory on sale of a property. The second stage involves production of a more tailored report, based on actual occupancy information to identify the most cost effective measures. The Green Deal can support households to install energy efficiency measures, including: insulation (loft, cavity or solid wall); draught-proofing; improved heating controls; double glazing; and renewable energy technologies (e.g. solar panels). 7 Energy Performance Certificates (EPCs) EPCs were introduced as part of the EU Energy Performance of Buildings Directive and present energy efficiency ratings of domestic and non-domestic buildings on a scale from A/A+ to G, based on an assessment of the age, size and fabric of the building. The EPC also contains recommendations on a range of measures to improve building energy efficiency. EPCs must be made available whenever a property is constructed, rented out or sold

12 Part 2: Policy measures implementing the Energy Efficiency Directive 11 Display Energy Certificates (DECs) From 1 October 2008, buildings occupied by a public authority have been required to have a DEC where the building has over 1000m 2 of usable floor space and is frequently visited by the public. Since January 2013, the threshold has been 500m 2 ; this will reduce to 250m 2 on 9 July DECs provide information on actual energy use, not just the theoretical energy rating of a building. Using an A-G rating, DECs take into account the location and size of a building and the way the building is used. The DEC is accompanied by a recommendation report that contains a range of possible improvements, including cost effective measures to improve the energy performance of the building. 9 Households and SMEs The UK already has a number of schemes which promote high quality energy audits to end users and fulfil the requirements of Article 8(1)-(3) in terms of encouraging household and SME energy audits. The UK will be introducing new legislation which will encourage SMEs to undergo energy audits. 10 The Green Deal is intended to encourage households to undertake energy assessments. It offers energy efficiency assessments, financing and the installation of energy efficiency measures through a network of Green Deal approved assessors, installers and providers. 188,234 Green Deal Assessments were lodged by the end of March 2014 (since January 2013). Approximately 693,000 measures were installed in around 580,000 properties through ECO, Cashback and Green Deal to the end of February 2014 (the latest month that we have complete data for). The Green Deal is currently a GB-wide policy; however Northern Ireland continues to develop a range of domestic energy efficiency programmes to promote energy efficiency in the domestic sector. In addition to the Green Deal, energy assessments and energy efficiency recommendations are available in the UK through the Carbon Trust. The Carbon Trust, originally set up and funded by the UK Government from 2001 to 2012 (and now a self-financing private company), promotes its Carbon Trust Standard to businesses. Obtaining the standard requires the measurement, reduction and management of emissions/energy use. Similarly, the Energy Saving Trust, which receives the majority of its funding from Government, provides advice on energy efficiency to businesses and households (through the Energy Savings Advice Service helpline), and also provides free resources to energy efficiency professionals throughout the UK. Northern Ireland Invest NI offers free energy and resource efficiency audits for businesses and provides technical support to help businesses progress suitable projects to the point of implementation. These programs support in the region of businesses per year. Energy issues are addressed primarily through site visits, audits and provision of advice. The Department of Social Development (DSD) also facilitates an energy efficiency advice line and information service that provides advice on grants available, how to access cash backs and any other offers consumers may be entitled to. It also provides factsheets and tips on saving energy in the home through its website As required by Article 8(2) 11

13 12 UK National Energy Efficiency Action Plan Scotland Improving the energy efficiency of SMEs is a priority for the Scottish Government. The new Resource Efficient Scotland programme, launched on 1 April 2013, offers comprehensive information, advice and support to business and public sector organisations to implement efficiency measures that will translate into cost savings and increased competitiveness. The programme aims to support at least 12,000 SMEs per year. This support includes site visits and audits, with a principal focus on the implementation of efficiency measures. As outlined in the Scottish Government Economic Strategy, 12 the Scottish Government established the Scottish Energy and Resource Efficiency Service (SERES). This is a virtual partnership that brings together existing business support and advice programmes delivered by a range of bodies, thereby making it easier for businesses to access energy and resource efficiency advice. Wales Wales funds the Carbon Trust to provide information, advice and support for SMEs to take action on energy efficiency, including providing interest free loans. Support for resource efficiency, including energy efficiency, is also integrated into the Welsh Government s Business Wales service, which offers audits from resource efficiency officers based in its regional hubs. The Energy Savings Opportunity Scheme The UK already has a number of schemes in place that encourage both SMEs and large enterprises to improve their energy efficiency; these schemes are detailed in Box 1. Building on this strong framework, the UK Government is introducing a new Energy Savings Opportunity Scheme (ESOS) which will place a new legal requirement on large enterprises to conduct energy audits which meet the requirements of Article 8(4) and Annex VI of the Directive. We are on target to have the legislative framework in place for this scheme by 5 June This scheme will be mandatory for all large UK undertakings (of which we estimate there to be around 7,300 in the UK), and we look forward to providing more detailed updates on uptake of audits in future NEEAPs. 13 Audits carried out We do not have complete data on the number of energy audits undertaken in the UK between April 2010 and April In the absence of this we are able to provide some alternative metrics relating to the Carbon Trust. The Carbon Trust s database on energy audits shows that between 2006 and 2011, a total of 8,547 organisations received a Carbon Trust audit; 1,671 of these organisations were large enterprises and 6,786 were SMEs. The database does not extend beyond The Carbon Trust Standard is a voluntary certification that enables organisations to demonstrate success in cutting their carbon footprint. Since one of the criteria for achieving the standard is having an energy management system, it is a useful indicator in this context. At the end of 2013, 430 organisations held one or more of the Carbon Trust Standard certifications. This is similar to previous, recent years. Of this number, 335 are in the private sector and the remainder are in public sector. Of those 335, the Carbon Trust estimate less than 10% are SMEs IA_v28_clean.pdf

14 Part 2: Policy measures implementing the Energy Efficiency Directive Metering and billing Smart Meters The smart meters programme aims to roll out smart electricity and gas meters to all domestic properties (in accordance with the EU Third Internal Energy Package) and smart or advanced meters to smaller non-domestic sites in Great Britain by the end of The roll out of smart meters into homes across Great Britain will remove the need for estimated billing, help households better manage their energy consumption, facilitate faster switching between suppliers and drive a more vibrant and competitive market that will foster the development of new energy products and services. Near-real time information from smart meters will help put consumers in control of their bills, leaving them better placed to reduce energy consumption. The introduction of smart meters will mean energy networks will have more granular information upon which to manage and plan current activities and assist the move towards smart grids. As of 31 December 2013 large suppliers had reported to the UK Government that they were operating 265,155 smart meters in domestic premises 14. In line with best practice and Article 9(2)(b) of the Directive, the Government has put in place a Data Access and Privacy Framework 15 that gives consumers control over who sees their energy consumption data, apart from where this is required for billing or other regulated duties. For example, network operators will be permitted access to half-hourly energy consumption data provided that they develop and submit for approval plans detailing how privacy will be ensured and what the data will be used for. This regulatory framework, informed by international experience, has been implemented by licence conditions that came in force in June 2013 and: Requires suppliers to get explicit (opt-in) consent in order to use their customers energy consumption data for marketing purposes; Allows suppliers to access monthly data for billing and for the purposes of fulfilling any statutory requirement or licence obligation (such as settlement, or preventing theft); Allows suppliers to access daily data provided that the customer does not object to (i.e. opt out of) this ; and Requires that suppliers must receive explicit (opt-in) consent in order to access halfhourly data. In accordance with Article 9(2)(a) and 9(2)(c), the second Smart Meters Equipment Technical Specification (SMETS 2) 16 will ensure meters are capable of providing customers with near real-time information on their energy usage and storing up to 24 months of consumption data as well as up to 3 months of half hourly export data. For the purposes of implementing Articles 9(2)(d) and 10(2)(b) of the Directive the Government introduced licence conditions in spring 2014 to ensure that if domestic customers request metering data on their electricity export and/ or electricity/ gas consumption, it will be made available to them by their supplier. A regulated 14 Smart_Meters_Great_Britain_quarter_4_2013.pdf

15 14 UK National Energy Efficiency Action Plan industry code (the Smart Energy Code 17 ) is in force and will enable authorised third parties (e.g. energy service companies and switching websites) to access consumers import and export data with the consumer s permission so they can provide services that will aid the informed comparison of energy tariffs by customers. Consumers are the focus of the smart meter installation process. A smart meter installation Code of Practice, 18 which came into force on 30 November 2012 through licence conditions, will ensure that consumers are given information at the time of installation about how their meter and In-Home Display can help them to save energy and so fulfils the requirements of Article 9(2) (e) of the Directive. Northern Ireland In July 2012 the Department of Enterprise, Trade and Investment (DETI) Minister announced that Northern Ireland would proceed with an electricity only smart meter rollout by A Cost Benefit Analysis of a long term smart metering deployment scenario for Northern Ireland has been carried out by the Northern Ireland Authority for Utility Regulation (NIAUR) and indicated a marginally positive NPV for electricity meters only. Currently, for the purposes of implementing aspects of Articles 9 and 10 of the Directive that relate to smart metering, DETI will introduce legislation to allow the Utility Regulator to introduce licence conditions that will apply once smart metering is introduced in Northern Ireland. NIAUR is currently preparing a consultation document and intend to consult in late spring 2014, focusing mainly on the scope, governance and roadmap required to achieve a smart meter rollout in Northern Ireland in line with the EU 2020 target. The consultation will consider issues such as the communications protocol; the role of prepayment meters in a rollout; and the timeframe for implementation. DETI will consider privacy issues as the nature of the rollout is further developed. Heat Metering District heating ( heat networks ) in the UK is a small sector. The amount of heat supplied to buildings in the UK via heat networks is around 2% of domestic, public sector and commercial heat demand 20 and there are approximately 2,000 schemes in the UK. 21 The most recent study of heat networks in the UK revealed that, for mixed end user city type schemes operated by a private company, all of the non-dwellings (ie the large heat loads) have revenue standard metering installed and any nodes supplying dwellings will have at least one heat meter at development level. This results from the commercial need to recover investment, fuel and operating costs from the sale of heat Gas smart metering is not economically viable mainly due to the fact that the costs of a gas smart meter rollout would have to be met by only a small number of consumers, as the gas market is not yet mature enough in Northern Ireland. The costs and benefits for gas smart metering will be revisited around Future_of_Heating_Accessible-10.pdf page Databuild, 2012, Catalogue of District Heating Schemes, with DECC additions

16 Part 2: Policy measures implementing the Energy Efficiency Directive 15 However, the study concluded that it was difficult to say how many dwellings are served by individual heat meters. We estimate that approximately 25% of existing residential-led heat networks schemes have heat meters installed. The charging mechanisms for the remaining 75% are based upon apportionment or a points-based system. Individual heat metering is being installed in new developments, particularly in the housing sector. An earlier study in 2007 indicated that 77% of dwellings in the social housing sector connected to a heat network did not have heat meters. 22 The UK s heat strategy The Government has identified heat networks as having an important role to play in the transition to low carbon heating. Heat makes up around half of the energy consumption in the UK and contributes around a third of the UK s greenhouse gas emissions. Heating within the domestic sector accounts for approximately 85% of UK domestic energy use (2012), and around 27% of UK total energy use (2012). 23 The Government is supporting the deployment of district heating through a number of actions set out in the March 2013 publication: The Future of heating: Meeting the challenge. 24 In Scotland, heat policy is devolved and the Scottish Government is consulting on support for district heating in its Heat Generation Policy Statement. 25 Key measures include setting a target for heat delivered by district heating and extending financial support. Regulation of heat networks The Government s implementation of the Directive s requirements in this area is guided by the importance of giving heating, cooling and hot water customers greater control over their consumption, and consequently costs and billing. Meters provide a direct financial incentive to reduce demand, increase awareness of energy use and result in a more equitable allocation of costs between customers. Effective implementation will enable heat network operators to gather information on heat losses and better manage their systems. The implementation of the Directive s measures will support the Government s overall ambitions for the expansion of the heat networks sector in the UK. The heat networks sector as a whole is not regulated in the same way as gas and electricity markets. The Government will introduce legislation to implement the Directive s requirements in this area. There are also complementary industry-led activities seeking to introduce a consumer protection scheme and establish common technical standards that will support the aims of the Directive, as these apply to heat networks. The Government s new regulations will require heat and cooling network operators to take the lead in implementing the requirements contained in Articles 9(1), 9(3), 10 and 11 of the Directive. The regulations will require network operators to establish the extent of metering and billing information across their networks. Some requirements are subject to tests of cost-efficiency and technical feasibility. The Government is producing guidance on the criteria and application of these tests; this will ensure consistency of approach and help to reduce the administrative burden on heat network operators in meeting the Directive s requirements. 22 DECC (2013). ECUK, Overall Tables 1.07, provisional 2012 levels. Based on 36,542 of domestic heat end use, with 43,153 total domestic consumption (thousand tonnes of oil equivalent). y/2011/05/18/241aecd2/defra%20heat%20metering%202007%20inc%20dh%20survey.pdf

17 16 UK National Energy Efficiency Action Plan The Government will be appointing a scheme administrator to monitor and support compliance. The scheme administrator will have several key regulatory responsibilities, including: Undertaking, or commissioning through a third party, a system of monitoring of scheme notification and monitoring for compliance, including through sample survey and site visits; Responsibility for the central guidance on technical feasibility and cost-effectiveness, though the Government will be responsible for commissioning the first template for this guidance; Responsibility for scheme enforcement. Billing and Costs of Access to Information Ensuring that energy customers receive frequent, accurate bills is a priority for Government. That is why we have placed legal obligations upon suppliers to roll out smart meters to all domestic premises and smart or advanced meters to smaller non-domestic sites by In addition to this, we already have a number of measures in place to ensure that bills are frequent, accurate and clear. Accuracy and frequency of bills There are a number of rules governing metering and meter readings within Great Britain. Under the standard licence conditions (SLC) for gas and electricity supply to both domestic and nondomestic customers, suppliers must take all reasonable steps to ensure they take a meter reading at least once every two years and accept meter readings when customers provide them. Suppliers are also required to take all reasonable steps to reflect the meter reading in the next bill or statement of account sent to the customer. Suppliers also have a commercial incentive through an industry code to meet a target of 97% of meters read once a year or more with financial penalties if they fail to meet this. Bills are calculated on the basis of a meter reading taken by a representative of the supplier, or the customer himself, or an estimate of the customer s use during the billing period. That estimate is based on previous use. In general, suppliers seek to read meters themselves at least once in every 12-month period with many seeking meter reading on a quarterly basis. In addition, suppliers are increasingly encouraging customers to provide their own meter reading by telephone or the internet. In order to comply with Article 10(1), the UK is amending licence conditions for the supply of gas and electricity in the GB market to ensure that suppliers provide customers with bills based on actual consumption at least once a year. Suppliers will be able to meet this requirement either through their own meter reading or through a reading supplied by the customer. Domestic gas and electricity customers using basic credit meters are generally billed (or where they pay by direct debit, receive a statement) for gas and electricity on a quarterly basis. In order to ensure that the GB market complies with Article 10(1), the UK is amending licence conditions to require suppliers to provide customers with billing information at least twice yearly and quarterly upon request or if they receive electronic billing. Receiving billing information Paperless and online billing is also popular and is widely available across the market. Ofgem, the independent regulator of the gas and electricity markets, has recognised the significance of online account management by allowing suppliers to offer it to customers as one of only two cash discounts allowed under its domestic retail market reforms.

18 Part 2: Policy measures implementing the Energy Efficiency Directive 17 In order to comply with Article 10(3)(b) and ensure that electronic billing remains an option for customers the Government is introducing licence conditions requiring suppliers to offer the option of online account management. Suppliers are already required to provide domestic customers with their bills free of charge. Charges related to energy use must be incorporated into a standing charge or single unit rate. This prevents suppliers from levelling an additional charge for bills and provides clear pricing which is easy to compare, in line with Article 11(1). Clarity of bills As required by Article 10(3)(b), customers already receive, on request, a clear and understandable explanation of how their bill was derived. As part of the recently introduced domestic Standards of Conduct, 26 suppliers must give information (whether in writing or orally) which is complete, accurate and not misleading and is communicated in plain and intelligible language. As is appropriate under Annex VII, paragraph 1(2), consumption data comparing energy usage in one billing period with the same period the previous year is already provided on domestic customers energy bills or statements; or, for those customers with online account management, electronically. Furthermore, where a customer requests that a supplier pass on their historic consumption data either to them or any other person, suppliers must comply with this request free of charge as required by Article 10(3)(a). Existing metering and billing arrangements also provide domestic customers with clear and understandable information about current actual prices and actual consumption in line with Annex VII, paragraph 1(2). Standard supply licence conditions for electricity and gas require suppliers to notify domestic customers of a unilateral change to a contract to increase charges or any other charge that significantly disadvantages the customer. Provision of information to customers In terms of the provision of contact details for energy efficiency organisations under Annex VII, paragraph 1(2), suppliers are required to maintain and provide information about the efficient use of energy to enable customers to make informed judgements about energy efficiency, together with details of sources of further energy efficiency information. This information must be provided free on request. Working with Government, the trade association for the industry, Energy UK, has launched a website, Compare my Energy, which helps consumers compare how energy efficient their home is with people in similar houses in their local area as recommend by Annex VII paragraph 1(2). Northern Ireland Suppliers of gas and electricity are subject to a number of requirements, through their licence conditions, in relation to the provision of billing and billing information to customers. Amongst other things, they are required to: Provide their domestic customers with a bill or statement on at least an annual basis which must show the amount of electricity consumed since last bill or statement; 26

19 18 UK National Energy Efficiency Action Plan Include details in the bill of the name of the tariff, the unit rate, any discount or premium applied, the total charges applicable setting out clearly any standing charges and showing charges both inclusive and exclusive of VAT, and the amount of gas or electricity consumed since the last bill or statement; Calculate bills based on meter readings, or based on an estimate if no meter read is available. Suppliers must make reasonable endeavours to take an actual meter reading; After providing an estimated bill, give customers details of how to undertake and register a meter reading themselves. A self-read must be reflected in the next bill, and where requested, an updated bill should be sent; Provide a choice of payment methods; Provide consumption data on request. In December 2013, DETI issued a public consultation on its proposals for amending the existing requirements on Northern Ireland suppliers in order to ensure compliance with the gas and electricity billing and metering aspects of the Directive. The main proposals include requirements for: Billing information to be provided to all customers (not just domestic customers) twice yearly; The option for a consumer to submit a self-read to be offered before a bill based on an estimate of the licence holder is issued; Information on the energy billing and historical consumption of final customers to be provided to energy service providers as well as suppliers; Final customers to be offered the option of electronic billing information and bills; Bills and billing information to be provided to final customers free of charge. DETI will be introducing regulations in June 2014 that will ensure compliance with the gas and electricity billing and metering provisions of the Directive in Northern Ireland. The regulations will implement the proposals set out above. 1.4 Consumer Information Programmes and Training In our Energy Efficiency Strategy the Government recognised that a lack of good quality, trusted information is one of the key barriers to energy efficiency take up. The Government has introduced a range of policies to help tackle this barrier and supports a number of training and awareness-raising initiatives. Information about existing energy efficiency mechanisms, financial and legal frameworks is widely available online via the GOV.uk website. Government also commissions research and evaluation projects to better understand how behavioural change can lead to savings in energy use for domestic consumers and SMEs. In 2013 the Government began a Heating Controls Trial to study the impact of trusted advice on managing heating controls in homes. A project with ENWORKS to better understand the barriers to energy efficiency faced by SMEs has also been commissioned. Such studies help inform our development of forward-looking, innovative policies. The UK will be introducing legislation in June to ensure that the requirements of Article 17 continue to be met.

20 Part 2: Policy measures implementing the Energy Efficiency Directive 19 Consumer Information The roll out of smart meters into homes across Great Britain will require installers to visit around 30 million premises by 2020, and presents energy suppliers with an opportunity to engage their customers on energy efficiency, as recognised by Article 12(2)(b). Energy suppliers are required to adhere to an Installation Code of Practice 27 when installing smart meters. This Code compels suppliers to demonstrate the smart metering system (including the in home display) and offer energy efficiency advice, including highlighting sources of further information. The Green Deal has a central role to play in raising consumer awareness of the benefits of installing energy efficiency measures; the Green Deal assessment provides the perfect opportunity for targeted advice to be given to consumers, as required by Article 17(2). On 2 December 2013, the Government announced plans to make the Green Deal more simple and accessible to consumers. 28 The Government recognises the vital role played by Local Authorities in driving awareness and uptake of energy efficiency measures 29. In July 2013 the Government launched a new 20 million fund to help local authorities drive street-by-street delivery of the Green Deal. In April 2014, it was announced that this funding has been increased to 88 million and will be awarded to 24 local authorities, helping around 32,000 households install energy efficiency home improvements. 30 To support the development of the Green Deal and ECO, the Government contracted the Energy Saving Advice Service to provide households with access to impartial, free advice on energy efficiency measures. The advice service signposts callers to a wide range of organisations that can help install energy-saving measures in their homes and reduce their fuel bills. ESAS helps the UK comply with Article 12(2) and 17(1) of the Directive. Awareness-raising and Training Initiatives for Citizens As required by Article 17(4), the Government supports a range of awareness-raising and training initiatives which highlight the benefits of energy efficiency. On 21 November 2013 the government sponsored three new awards at the Green Economy Awards. The Awards recognised excellence in environmental responsibility and reconfiguration of business models around sustainability principles. In addition to this, the government held the Big Energy Saving Week, a national campaign to help consumers cut fuel bills and get all the financial support they are entitled to, from January The Big Energy Saving Week is a joint project between Citizens Advice, Government, energy suppliers, Energy Saving Trust, Acre, Age UK and other voluntary and charitable organisations. As part of the Green Deal, the Government has supported the development of a national Open Homes network making it easy for people to find and see homes that have been improved by energy saving retrofits. 27 Suppliers are obliged by Conditions 41 and 42 in the Standard Conditions of Electricity Supply Licences and Conditions 35 and 36 in Gas Supply Licences to adhere to the Code As suggested in Article 17(4) 30

21 20 UK National Energy Efficiency Action Plan Funding As recognised by Article 12(2), behavioural change can be promoted by fiscal incentives and access to finance, grants or subsidies. A range of policies in the UK aim to effect behavioural change in this manner. The Green Deal Finance Company, an industry led consortium with over 50 members, aims to deliver universal low cost financing to households for the installation of energy efficiency measures under the Green Deal. ECO works alongside the Green Deal, driving the uptake of measures which could not be fully financed under the Green Deal and helping low income households. In December 2013, the Government announced a new package of incentives and support to encourage the take up of energy efficiency improvements for households, the domestic private rented sector and the public sector. The overall package is worth 180 million each year for three years from The non-domestic Renewable Heat Incentive (RHI), introduced in November 2011, is a subsidy to promote the uptake of renewable heat technologies. Government has consulted on proposals to include energy efficiency measures as part of the eligibility requirements for the non-domestic scheme. In its consultation response, 31 the Government acknowledged that there is scope to introduce energy efficiency criteria into the scheme in the near future. The Government launched a domestic scheme in spring To be eligible for the domestic RHI, all applicants will need to provide evidence that they have identified, through a Green Deal Assessment, which energy efficiency measures would be cost-effective for their property and have, at a minimum, installed loft insulation and cavity wall insulation where these measures are suitable and cost-effective. Northern Ireland Information and Training The provision of consumer information and training is promoted by a range of schemes in Northern Ireland, in particular Invest NI. 32 In addition, electricity and gas suppliers have energy efficiency promotion conditions in their licences. The Energy Performance of Buildings enforcement authorities (largely District Councils) run regular themed awareness raising events and provide advice on compliance, including via a dedicated helpline. The Department of Finance and Personnel (DFP) also hosts awareness seminars when the Building Regulations are amended. Information on energy efficiency measures is available at and the Northern Ireland Bryson Energy Advice Line Funding There is a range of funding available to encourage the uptake of energy efficiency measures in Northern Ireland. This includes the Northern Ireland Sustainable Energy Programme which provides grants for the implementation of energy efficiency schemes for domestic consumers. Funding is also provided for more specific measures aimed at vulnerable customers such as the Warm Homes Scheme, which provides a package of energy efficiency and heating measures aimed at reducing fuel poverty. The Boiler Replacement Scheme offers grants to low income households to replace old, inefficient boilers. This helps to address the dependence of the majority of households in NI that use oil as their main heating fuel by seeking to reduce overall energy consumption through the use of more efficient means Renewable_Heat_Incentive_-_Improving_Support_Increasing_Uptake_-_PUBLISHED.pdf 32 See Energy Audits section of NEEAP